Gold Holds Near $5,050 as Dovish Fed Bets and Dollar Weakness Support Rally
Gold pared early intraday losses to close near $5,048/oz after a volatile session, remaining just below the $5,050 psychological level. The recovery followed growing market expectations for a dovish Federal Reserve in 2025 — CME FedWatch now puts a ~68% chance of at least two rate cuts this year — and a 0.6% drop in the US Dollar Index (DXY). Technicals showed a hammer candlestick, support at $5,000 and the 50-day moving average near $4,980, with immediate resistance at $5,080 and $5,100. Market volume rose ~22% versus the 30-day average; managed-money futures added 8,423 net long contracts while global gold ETFs saw modest outflows (~$85m). Treasury yields eased (10-year -8bps to 4.12%), silver gained 0.4% to $28.75, and miners underperformed (GDX -1.1%). Broader drivers include softer US inflation/employment prints, central bank gold buying (~25t added by EM banks in February), and geopolitical risks supporting safe-haven demand. Key trader takeaways: watch Fed communications and US data for shifts in rate-cut probabilities, monitor DXY and 10-year yield for directional bias, and track futures positioning vs ETF flows for potential short-covering or continuation moves around $5,000–$5,080.
Bullish
The article points to factors that typically support higher gold prices: rising odds of a dovish Fed (CME FedWatch ~68% for multiple 2025 cuts), a weakening US dollar (-0.6% DXY), and falling Treasury yields (10-year -8bps). These reduce the opportunity cost of holding non-yielding gold and increase international demand. Technicals showed a recovery with a hammer candlestick, firm support at $5,000 and buying interest below $5,020, while futures positioning (managed-money adding ~8.4k contracts) indicates speculative accumulation despite modest ETF outflows. Historically, Fed easing cycles have coincided with multi-month gold rallies (e.g., 2019). Short-term, the market may see volatility around key levels ($5,000 support, $5,080–$5,120 resistance) as traders react to data and Fed commentary; but if dovish pricing and dollar weakness persist, momentum could push gold higher. Risks that could temper gains include renewed dollar strength if US data surprises to the upside, or a reversal in yield declines. Overall bias: bullish, conditional on continued dovish Fed expectations and DXY/ yields remaining weak.